Samaresh Prasad Chowdhury, Residing Member

The instant complaint under Section 17 (inadvertently mentioned under Section 12) of the Consumer Protection Act, 1986 (for brevity, ‘the Act’) is at the instance of a couple against the Developer/Builder on the allegation of deficiency in services on the part of developer/builder in a consumer dispute of housing construction.

Succinctly put, complainants’ case is that on the basis of an application made by them, the OPs by their letter dated 26.09.2011 provisionally allotted one apartment measuring about 1466 sq. ft. being apartment No.3C in Tower 5 along with one car parking space in the basement at Taraang , Shristi Nagar, the New Asansol within the District of Paschim Burdwan at a total consideration of Rs.29,32,000/- for the apartment, Rs.1,50,000/- for car parking space and service tax of Rs.75,499/- aggregating Rs.31,57,499/-. The complainants have stated that they have paid Rs.5,26,125/- to the OPs on diverse dates as part consideration amount towards the said total consideration amount. In order to obtain the housing loan, the complainants approached the State Bank of India, Mihijam Branch and the Branch Manager of the said bank sent a letter on 22.02.2012 to the Assistant General Manager, S.B.I, RASMEC, Asansol and requested to send them pre-sanctioned survey report and legal opinion but no response has been received to that effect. On 03.04.2013, the complainants sent a letter to the OP No.2 requesting for refund total amount of Rs.5,26,125/- to them as early as possible. On 31.07.2013, the OPs sent a letter to the complainant thereby requesting to make payment amounting to Rs.3,02,260/- towards progressive payment. After receiving the said letter, the complainants by a letter dated 13.08.2013 requested the OPs as second time for refund of the amount within 15 days. In this way, several requests and reminders of the complainants went in vain. Ultimately, the OP sent a letter on 13.08.2014 thereby cancelled the booking of the unit and agreed to refund the booking amount to the complainants against such cancellation. However, despite of request and reminder no such refund has been made. Hence, the complainants have come up of this Commission with the instant complaint with prayer for following reliefs viz.- (a) refund of Rs.5,26,115/- along with interest thereon @ 18% p.a. from the date of receipt of the said amount till the date of payment; (b) Rs.4,00,000/- as compensation towards mental pain, agony and harassment and (c) Rs.30,000/- towards litigation cost etc.

The OPs by filing a written version have stated that the complaint is barred by limitation and also barred by the principles of res judicata. It has been further been stated that they are always ready to refund the earnest money by way of several instalments.

Both the parties have tendered evidence through affidavit. They have also given reply against the questionnaire set forth by their adversaries. However, either of the parties has not filed any brief notes of argument although they were represented through their Ld. Advocates.

Undisputedly, Bengal Shristi Infrastructure Development Ltd. (OP No.1) issued advertisement towards selling flats and apartment in their new project at New Asansol within District- Paschim Burdwan. The complainants being allured with such advertisement agreed to purchase one apartment along with one car parking space and with that aim in view filed an application being No.0034 to the developer/builder. On 26.09.2011, the OPs/developer vide their letter dated 26.09.2011 provisionally allotted an apartment measuring about 1466 sq. ft. being apartment No.3C in Tower 5 along with one car parking space in the basement of the said tower at Taraang Shristi Nagar, the new Asansol, District- Paschim Burdwan at a consideration of Rs.29,32,000/- for the apartment, Rs.75,499/- as service tax and Rs.1,50,000/- for car parking space aggregating Rs.31,57,499/-. It is not in dispute that for the purpose of purchasing the said apartment the complainants have already paid Rs.1,46,600/- through a cheque on 29.08.2011, Rs.3,79,525/- through two cheques dated 30.11.2011 aggregating Rs.5,26,125/-. The evidence on record also speaks that in order to meet the expenses to purchase the apartment the complainants approached the State Bank of India, Mihijam Branch, District- Jamtara (Jharkhand). Accordingly, on 22.02.2012 the Branch Manager of S.B.I, Mihijam Branch wrote a letter to the Assistant General Manager, State Bank of Inida, RASMEC, Asansol with a request to send pre-sanctioned survey report and legal opinion. However, no such pre-sanctioned survey report or legal opinion has been given by the Assistant General Manager, S.B.I., RASMEC, Asansol.

In this backdrop, on 03.04.2013 the complainants sent a letter to the OP No.2 requesting them to arrange refund of earnest money amounting to Rs.5,26,125/- paid by the complainants as part consideration amount towards the total consideration amount. The record reveals that time and again the complainants approached the developer with a request to refund the amount already paid by them but till new no refund has been made by the builder/developer.

Now, the whole question arises as to whether the complainants are entitled to refund of the amount. In this regard Clause VI of the agreement appears to be relevant which is reproduces below:-

“6. Upon withdrawal/cancellation of the booking by the Allottee(s), but before delivery of possession is made over to the Allottee(s), the money paid by the Allottee(s) shall be refunded to him without any interest and after deduction sum towards service charges which is equivalent to 5% of the total price payable for the allotted apartment. The Allottee(s) hereby agrees/agree to such interest free refund and the deduction and further agrees/agree not to raise objection thereto.”

Mr. Subrata Ghosh, Ld. Advocate for the complainants has submitted that on conjoint reading Clauses 6, 7 and 11 of the terms and conditions it would be quite clear that the developer has adopted an unfair means by claiming 18% for the delay in case of failure by the purchaser to make payment within the time frame and on the contrary in case of withdrawal/cancellation of the booking they will take 5% of the total price payable for the allotted apartment. Therefore, for appreciation of the entire situation it would be worthwhile to set out the Clause 7 and Clause 11 of the agreement which rewrites below:-

“7. The Allottee(s) agrees/agree to make punctual payments of the price and/or the instalments in the manner mentioned int he Provisional Allotment Letter for the Said Apartment.

Any delay beyond due date will attract interest @ 18% p.a. for the period of delay up to a maximum of two months. The Company reserves the right to cancel the allotment if payment including interest so calculated is delayed beyond two months from the due date of payment. At such cancellation the total deposit or instalments paid by the allottee will be refunded without any interest and after deduction of the applicable service charges.”

“11. The Company shall endeavour to give possession of the Said Apartment to the Allottee(s) within 30 (thirty) months from the dagte hereof subject to provisions of allotment and subject to receipt of all payments as stipulated and subject to receipt of other charges due and payable. The Company upon developing the Said Apartment shall issue final notice to the Allottee(s), who shall/will within 30 (thirty) days thereof, remit all dues and take possession of the Said Apartment. If the Allottee(s) fail/fails for any reason whatsoever to take possession of the Said Apartment within 30 (thirty) days of such notice, then after 30 (thirty) of such notice, the Allottee(s) shall/will be deemed to have taken possession of the Said Apartment and shall be liable to bear all maintenance charges and all other levies on account of the Said Apartment”

Therefore, the question comes up for consideration whether the amount mentioned in Clause 6 and Clause 7 of the agreement are acceptable in the eye of law. It is quite evident that in case of delay beyond the due date the purchaser shall have to pay interest @ 18% p.a. for the period of delay up to a maximum of two months and the Company reserves the right to cancel the allotment if payment including interest so calculated is delayed beyond two months from the date of payment. On the contrary, if a person withdraws or cancels the booking he is entitled to refund the amount paid by him without any interest and after deduction of 5% of the total price payable for the allotted apartment.

It is quite evident that the terms of its nature is wholly one sided, unfair and not conscionable. The developer charges interest 18% p.a. in the event of the delay on the part of purchaser in making payment but seeks to refund the amount without interest after deduction of 5% of the total price payable for the allotment apartment. Needless to say, such a term in the agreement encourages the developer to divert the funds collected by them from one project to another project being undertaken by them. Therefore, the interest being charged by the bank and financial institutions for financing project of the builders is many times more than nominal compensation which the builder would pay to the flat buyers in the form of compensation. In fact, the developer has not claimed the entire amount recovered by it from the purchaser was spent on this very project. This gives credence to the allegation of complainants that their money has been used elsewhere. Therefore, such a practice constitutes unfair trade practice.

In reply to the questionnaire set forth by the complainants, on behalf of OP it has been admitted that on the date of giving reply i.e. on 24.04.2019 the construction of the project has not yet been completed and the construction of the project has got delayed due to various reasons. On behalf of OP in another question set forth by the complainants, it has also been admitted that as per the development agreement executed, Asansol – Durgapur Development Authority (ADDA) being the owner of land was supposed to provide all the necessary support by issuing various No Objection Certificates and for obtaining various permission, approvals, sanctions but there was lack of cooperation on the part of ADDA. It signifies that the developer collected the money from the prospective buyers without obtaining required permissions including sanction. Relying upon the decision of the Hon’ble Supreme Court reported in II (2000) CPJ1 (Ghaziabad Development Authority vs.- Union of India) the Hon’ble National Commission in a decision reported in III (2007) CPJ7 (Kamal Sood vs.- DLF Universal Ltd.) has observed that it is unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permission, such as Zoning Plan, lay out plan etc. It is the duty of the builder to obtain the requisite permissions or sanctions, in the first instance, and, thereafter, recover the consideration money from the purchaser. Therefore, receipt of Rs.5,26,125/- by the developer from the complainants without obtaining required permissions not only constitutes deficiency in services but also amounts to unfair trade practice within the meaning of Section 2(1)(r) of the Act.

Mr. Rajesh Biswas, Ld. Advocate for the opposite parties has contended that the complaint is barred by the principles of res- judicata. The fact remains that the complainants previously lodged a complaint before the Ld. District Forum and in the said case, OPs filed an application being MA/87/2016 challenging the maintainability of the complaint on the ground of pecuniary jurisdiction. The said application was allowed on contest on 26.07.2016 and consequently the complaint being CC/208/2015 was rejected and the Ld. District Forum given liberty to the complainants to approach the appropriate Forum, if not barred otherwise. However, in place of the word “rejected” the word “dismissed” has been mentioned and as such the Ld. Advocate for the OPs submit that the complaint filed in this Commission is barred by the principles of res- judicata. In support of such submission Ld. Advocate for the complainants place reliance to a decision of Hon’ble National Commission reported in 2019 (2) CPR 118 (Mridulika Gupta and Others Vs.- M/s Agarwal Associates (promoters) Ltd.). Ld. Advocate in this connection has also submitted that the complaint is barred by limitation because the claim has not been made within two years from the date of accrual of cause of action as per provision of Section 24 A of the Act. In this regard, Ld. Advocate for the OPs also placed reliance to another decision reported in 2018 (2) CPR 601 (NC) (Ratan Kumar Mukhopadhyay vs.- Amit Basu and Others).

We have considered the submission made by the Ld. advocate in this regard. The complaint was not dismissed by the Ld. District Forum on merit rather on technical ground for want of pecuniary jurisdiction. The issues involved in the case has not been decided on merit and as such the principles of res-judicata though applies in a consumer dispute yet it would not be applicable in the facts and circumstances of the case. Equally, the complaint cannot be said to be barred by limitation because the committed date of delivery of possession was March, 2014 and the complainants lodged the complaint before the Ld. District Forum on 29.09.2015 and thereafter the complainants pursued the said complaint till the date of final disposal on 26.07.2016 and after obtaining liberty from the Ld. District Forum lodged the complaint in

this Commission on 01.09.2016. Admittedly, the OPs have not yet refunded the amount paid by the complainants in advance. Therefore, the complaint cannot be said to be barred by limitation. After giving due consideration to the submission made by the Ld. Advocates appearing for the parties, it appears that despite receipt of letter on 03.04.2013 for refund of money the OPs did not give any reply and have shown masterly inactivity to fulfil their part of obligations. It is also transpired that even within 30 months from the date of allotment the developer could not construct the building and therefore the complainants are entitled to refund the amount of Rs.5,26,125/- along with compensation in the form of simple interest @ 9% p.a. i.e. prevalent current interest in bank from the committed date of possession i.e. from 01.04.2014 till its realisation. As the situation compelled the complainants to lodge the complaint, they are also entitled to litigation cost which we quantify at Rs.10,000/-. In view of the above discussion, the complaint is allowed on contest with the following directions:- i. The OP Nos. 1 & 2 are directed to refund Rs.5,26,125/- along with compensation in the form of simple interest @ 9% p.a. from the committed date of possession i.e. from 01.04.2014 till its total realisation; ii. The OP Nos.1 and 2 is directed to pay a sum of Rs.10,000/- to the complainants as costs of litigation; iii. The above payments must be paid within 60 days from date.